202 F.3d 443 (1st Cir.

2000)

SUR CONTRA LA CONTAMINACION, Petitioner,

v.
ENVIRONMENTAL PROTECTION AGENCY, Respondent,
and
AES PUERTO RICO L.P., Intervenor.
No. 99-1855.

United States Court of Appeals, For the First Circuit.

Heard Jan. 7, 2000.
Decided February 4, 2000.

PETITION FOR REVIEW OF A FINAL ACTION OF THE

ENVIRONMENTAL PROTECTION AGENCY.[Copyrighted Material
Omitted]
Pedro J. Varela for petitioner.
Michele L. Walter, with whom Lois J. Schiffer, Assistant Attorney
General, Environment and Natural Resources Division, Alice L. Mattice,
Attorney, Environmental Defense Section, U.S. Department of Justice, M.
Lea Anderson, Attorney, Office of General Counsel, U.S. Environmental
Protection Agency, and Joseph A. Siegel, Office of Regional Counsel,
U.S. Environmental Protection Agency, Region II, were on brief, for
respondent.
Deborah E. Jennings, with whom Monica D. Gibson and Piper Marbury
Rudnick & Wolfe LLP were on brief, for intervenor.
Before Lynch, Circuit Judge, Campbell, Senior Circuit Judge, and Stahl,
Circuit Judge.
LYNCH, Circuit Judge.

Sur Contra la Contaminacion (SURCCo), a community organization made up

of residents of Guayama, Puerto Rico, challenges a Prevention of Significant
Deterioration (PSD) permit, issued by the Environmental Protection Agency,

that authorizes construction of a power plant in the ward of Jobos within that
municipality. The group contends that the Agency's decision to grant the permit
was arbitrary and capricious and in violation of the Executive Order on
Environmental Justice. See Federal Actions To Address Environmental Justice
in Minority Populations and Low-Income Populations, Exec. Order No. 12,898,
59 Fed. Reg. 7629 (1994). The Environmental Appeals Board carefully
considered the challenge and denied it. See In re AES Puerto Rico, L.P., 29
Envtl. L. Rep. (Envtl. L. Inst.) 41,132 (Envtl. App. Bd. May 27, 1999). For the
following reasons, we, too, reject the challenge.
I.
2

On January 10, 1996, Region II of the EPA received a PSD permit application
from AES Puerto Rico L.P. for a 454-megawatt coal-fired, steam-electric
cogeneration power plant it wished to build in Guayama.1 The permit was
required under the Clean Air Act because the plant would be a major new
stationary source of certain pollutants, including sulfur dioxide and fine
particulate matter. See 42 U.S.C. 7475, 7479; 40 C.F.R. 52.21(b)(1)(i)(a).
PSD permits are designed to insure that covered pollutants emitted by new or
modified sources do not exceed the allowable increments of additional air
pollutants (the increments) or lead to the exceeding of the National Ambient
Air Quality Standards (the Standards) in areas that have been designated
"attainment" or "unclassifiable."2 See 42 U.S.C. 7471, 7473. The PSD
program represents a balancing of "economic growth" with the "preservation of
existing clean air resources." Id. 7470(3).

Before the EPA grants a PSD permit, the owner or operator of the proposed
facility must satisfy certain prerequisites, two of which are of importance here.
First, a permit will be issued only if the owner "demonstrates... that emissions
from construction or operation of such facility will not cause, or contribute to,
air pollution in excess" of the increments or the Standards. 42 U.S.C. 7475(a)
(3); 40 C.F.R. 52.21(k). This is accomplished through air quality modeling
and ambient air monitoring, see 40 C.F.R. 52.21(l), (m), though the
extensiveness of these two inquiries can vary. According to the EPA's draft
New Source Review Workshop Manual,3 "a full impact analysis," including
"multi-source modeling," i.e., air quality modeling that takes into account the
proposed source, existing sources, and residential, commercial, and industrial
growth that accompanies the new source, for a particular pollutant is not
required "when emissions of that pollutant from a proposed source... would not
increase ambient concentrations by more than prescribed significant ambient
levels." Further, the EPA may waive the air monitoring requirement if "[t]he
emissions increase of the pollutant from the new source... would cause, in any

area, air quality impacts less than" certain de minimis monitoring levels. 40
C.F.R. 52.21(i)(8)(i).
4

Here, AES used EPA-approved air quality modeling techniques to predict

emissions of both sulfur dioxide and fine particulate matter from the proposed
plant. The predicted sulfur dioxide emissions were all below the thresholds,
though the one for the twenty-four hour averaging time came very close to the
significant impact level (.03 micrograms per cubic meter below the threshold).
As a result, the Region did not require AES to conduct a full impact analysis
and exempted AES from conducting preconstruction ambient air monitoring for
sulfur dioxide. The predicted fine particulate matter emissions, however, were
above the designated significant impact levels and de minimis monitoring
levels, so the EPA required AES to conduct a full impact analysis and ambient
air monitoring of that pollutant. Both of these analyses were conducted and
both indicated that the proposed plant would not cause or contribute to a
violation of the Standards or the PSD increments.

Second, a permit will not be issued unless the "proposed facility is subject to
the best available control technology [(BACT)] for each pollutant subject to
regulation." 42 U.S.C. 7475(a)(4). BACT "means an emissions limitation...
based on the maximum degree of reduction for each pollutant subject to
regulation under [the] Act which would be emitted from any proposed major
stationary source... which the Administrator, on a case-by-case basis, taking
into account energy, environmental, and economic impacts and other costs,
determines is achievable for such source... through application of production
processes or available methods, systems, and techniques...." 40 C.F.R.
52.21(b)(12).

AES proposed a novel combination of three proven control technologies:

circulating fluidized bed boilers with limestone injection; low sulfur coal; and a
dry scrubber. The company claims that this combination will lead to "one of the
world's cleanest coal-fired power plants." Though this combination has not been
used before, the EPA believes that this control technique is "technically
feasible" and "will result in a real decrease in impacts." It, therefore, accepted
the combined technologies as the BACT.

On April 4, 1997, the Region published a notice that announced its intention to
issue the PSD permit to AES. As required, the Region conducted public
hearings and received written submissions, which it reviewed. See 42 U.S.C.
7470(5), 7475(a)(2). In response to the community's concerns, the EPA
conditioned the permit on AES's conducting post-permit multi-source modeling
and ambient air monitoring of sulfur dioxide, even though these tests were not

required by the Act or the regulations.4 Also, the EPA prepared an

environmental justice analysis. See Exec. Order No. 12,898, 59 Fed. Reg. 7629
(1994). On September 18, 1998, the Region issued the PSD permit. A number
of individuals and groups, including SURCCo, challenged the petition before
the Environmental Appeals Board. The Board, on May 27, 1999, denied these
petitions for review.5 See In re AES, 29 Envtl. L. Rep. at 41,132. SURCCo
now brings this petition.
II.
8

We have jurisdiction to review this petition. See 42 U.S.C. 7607(b)(1); 40

C.F.R. 124.19(f)(1). Our review of the permit is governed by the
Administrative Procedure Act's "arbitrary and capricious" standard. See 5
U.S.C. 706(2)(A); Pan Am. Grain Mfg. Co. v. U.S. EPA, 95 F.3d 101, 105
(1st Cir. 1996) (reviewing state implementation plan); Adams v. U.S. EPA, 38
F.3d 43, 49 (1st Cir. 1994) (reviewing NPDES permit); Citizens for Clean Air
v. U.S. EPA, 959 F.2d 839, 845 (9th Cir. 1992) (reviewing PSD permit).

SURCCo's petition focuses on purported technical errors in the air quality

analyses of sulfur dioxide and fine particulate matter and on assertions that the
EPA should have applied its discretion differently. SURCCo does not directly
challenge the PSD permit regulations or Guayama's attainment designation. The
EPA, assisted by AES, defends the permit.
A. Sulfur Dioxide

10

SURCCo first alleges that the EPA should have required AES to conduct a full
impact analysis of sulfur dioxide emissions. AES's modeled impact analysis for
the 24-hour averaging time for sulfur dioxide emissions (4.97 micrograms per
cubic meter) was minutely below the significant impact level (5.00 micrograms
per cubic meter). SURCCo contends that the EPA should have ordered a full
impact analysis before granting the final permit because: a) the EPA accepted
"a combination of controls which have never been used before," and b) to
achieve the emissions limit, AES must achieve a 99% efficiency rate. That is,
because the efficiency of this combination of technologies is untested, the EPA
should have ordered a full impact study despite the fact that the modeled
impact was below the significant impact level that would automatically trigger
further testing. Further, SURCCo says that evidence it submitted -- which the
EPA rejected -- contradicted AES's impact analysis. The EPA says, in response,
that "the permit requires AES to limit the facility's emission rate to extremely
low levels through an innovative combination of state-of-the-art control

technologies." EPA also says that AES used appropriate models while "the
modeling on which SURCCo relies applied the models simplistically and made
unrealistic assumptions."
11

SURCCo has provided no evidence of arbitrariness or capriciousness in the

EPA's determination that AES's proposed controls will achieve BACT, even
though the combination of controls is novel. Each of these three components
has been tested and used; only their combination is new. It was rational for the
Agency to prefer its own model, to reject SURCCo's proposed alternative
modeling that allegedly showed sulfur dioxide emissions above the threshold
levels, and to accept, instead, AES's modeling. As other courts have held, the
Agency's choice of a model will be sustained if it bears a "rational relationship
to the characteristics of the data to which it is applied." Appalachian Power Co.
v. EPA, 135 F.3d 791, 802 (D.C. Cir. 1998) (computer models); see also Pan
Am. Grain, 95 F.3d at 105. The Agency was, thus, within its discretion, under
the regulations, to exempt AES from conducting a full impact analysis.

12

SURCCo next alleges that the EPA erred in including in its permit a condition
that a full impact analysis be conducted after the issuance of the permit. This is,
in a sense, an odd argument for SURCCo to make, but it is made in furtherance
of the plea that a full impact analysis be required before, not after, the permit
issues. A post-permit analysis will not do, SURCCo says, because this denies
SURCCo the right to comment on data collected in that analysis. Without
accepting the premise that a community group has no mechanism at all to
comment, we note that there is no legal requirement that there be public
comment for a post-permit analysis. Indeed, the regulations allow the EPA to
require post-operation monitoring. See 40 C.F.R. 52.21(m)(2). Further, the
analysis must be conducted in accordance with EPA models and protocols, see
40 C.F.R. 52.21(l)(1), which have been subject to nationwide public review.6

13

SURRCo next contends that the EPA relied on outdated -- and perhaps
incorrect -- air quality data to evaluate current air quality conditions in
Guayama. It claims that AES should have relied on more recent data collected
by the Puerto Rico Environmental Quality Board in 1990. Further, before the
EPA issued this permit, it should have conducted ambient air quality analysis
(or, alternatively, should have relied on more recent data) in order to determine
if Guayama is, in fact, in attainment. Failure to have done so, SURCCO claims,
was error. The EPA replies that it had no "reason to question the continuing
validity of its conclusion that total sulfur dioxide emissions from all sources in
the area were well below the [Standards], because no major new sources had
been constructed in the area since" 1983, when the EPA last determined that
the air quality in the area was below the Standards. The EPA also states that the

Environmental Quality Board's data would have been rejected if it had been
presented. Finally, the EPA says that ambient air monitoring is required once
the facility is in operation. In this case, there is no legal requirement that
ambient air monitoring should have been done prior to the issuance of the
permit, nor is there evidence that casts doubt on the EPA's conclusion that
current air quality is within the Standards.
B. Fine Particulate Matter
14

SURCCo contends that AES's fine particulate matter analysis was flawed
because AES used old and unrepresentative data and failed to use more recent
data that was available to it before it issued the permit. They contend that if the
more recent data were used the analysis would show that the fine particulate
matter standard would be exceeded. The EPA, in response, contends that AES
complied with all of the modeling and monitoring requirements and used the
most recent data available to it prior to its permit application. The regulations
do not require AES to consider post-application data. See 40 C.F.R. 52.21(m)
(1)(iv) (background monitoring data must "represent at least the year preceding
receipt of the [permit] application"). While some different fact patterns (e.g., a
great delay) might give SURCCo's argument more weight, the facts here do
not. The EPA and AES present rational evidence that the more recent data, on
which SURCCo relies, are unrepresentative and when corrected actually
confirm AES's analysis that the standards will not be exceeded. The EPA also
properly explained why it modified the permit to include a revised BACT limit
for fine particulate matter. Finally, the EPA also acted reasonably when it asked
AES (after the public comment period) to submit additional information to take
account of this revised limit. See 40 C.F.R. 124.17(b).
III.

15

SURCCo asks us, as well, to revoke the permit because of alleged violations of
the President's Executive Order on Environmental Justice. See Exec. Order No.
12,898, 59 Fed. Reg. 7629 (1994). The Order requires that, "[t]o the greatest
extent practicable and permitted by law,... each Federal agency shall make
achieving environmental justice part of its mission by identifying and
addressing, as appropriate, disproportionately high and adverse human health or
environmental effects of its programs, policies, and activities on minority
populations and low-income populations." Id. 1-101, 59 Fed. Reg. at 7629.

16

The Order, however, was "intended only to improve the internal management
of the executive branch"; by its own words, the order "shall not be construed to

create any right to judicial review." Id. 6-609, 59 Fed. Reg. at 7632-33. We
therefore cannot review the permit on this basis. See Morongo Band of Mission
Indians v. FAA, 161 F.3d 569, 575 (9th Cir. 1998); see also Air Trans. Ass'n of
Am. v. FAA, 169 F.3d 1, 8-9 (D.C. Cir. 1999).
17

We have considered SURCCo's other arguments, as well, and conclude that

they are without merit.
IV.

18

While the residents of Guayama may, indeed, have valid concerns about the air
quality in their municipality, and in particular in Jobos, SURCCo's petition
presents no basis to conclude that Region II's grant of a PSD permit to AES was
arbitrary or capricious. As this court said in Pan American Grain Manufacturing
Co., "[i]n each instance the EPA presented reasoned explanations...
notwithstanding petitioner's objections. Moreover, petitioner's criticisms...
involve areas in which EPA's expertise is heavily implicated, and we may not
substitute our judgment for that of the Administrator." Pan Am. Grain, 95 F.3d
at 105 (internal quotation marks and citations omitted). SURCCo's concerns,
insofar as they relate to Guayama's attainment designation, Puerto Rico's State
Implementation Plan, emissions from other facilities in the area, or other
matters, do not effect the validity of the permit and should be presented in other
fora. SURCCo's involvement was nonetheless of value to its objectives. That
the permit issued here is particularly stringent may be due in large part to the
participation of the area residents.

19

Petition denied.

NOTES:
1

The PSD permit program constitutes part of a state's State Implementation Plan
(SIP), which is the program designed to attain and maintain the National
Ambient Air Quality Standards within each state. Since the EPA has found that
Puerto Rico's SIP does not meet the Clean Air Act's PSD requirements, the
federal PSD plan has been incorporated into Puerto Rico's SIP. See 40 C.F.R.
52.2729 (finding that Puerto Rico's SIP "does not include approvable
procedures for preventing the significant deterioration of air quality" and
incorporating the federal plan); see also 40 C.F.R. 52.21(b)-(w) (federal PSD
plan).

Guayama has been designated by the EPA as an "attainment" area for sulfur
dioxide and an "unclassifiable" area for fine particulate matter. See 40 C.F.R.
81.355.

The Manual, while not binding on the agency, represents the EPA's views on
technical issues; accordingly, the Regions give it weight in their decisions.

Two days before oral argument, the EPA notified the court and the other parties
of the results of two post-permit modeling analyses conducted by AES. The
first analysis was based on maximum permitted emission limits of all sources in
the area and the second was based on actual emissions from those sources
during a two-year period. The first analysis indicated that, if the sources
operated at maximum permitted sulfur content, there would be a violation of
the Standards. The second analysis indicated no violations of the Standards.
The EPA says that it will work with the Puerto Rico Environmental Quality
Board to revise the Commonwealth's State Implementation Plan in order to
lower the allowable emissions limits of existing sources. If the Board fails to
cooperate in the Plan's revision, the EPA has the authority to require it to do so.
See 42 U.S.C. 7410(k)(5). The analyses have no effect on the permit decision
at issue here since the modeled sulfur dioxide emissions from the proposed
plant are not significant. See 40 C.F.R. 51.165(b)(2).

"Denial of the petition for review" is the term of art under the regulations, but
the term is a bit misleading. In fact, the Environmental Appeals Board does
consider the arguments made and, in that sense, does review the Region's
action.

SURCCo's claim that the Agency acted arbitrarily when it deleted the clause
"impacting AES-PRCP's Significant Impact Area" from the permit also fails
because, as the EPA notes, that language was unnecessary since the EPA
determined that the plant would have no "significant impact."